THE DISTILLERY: No other deal ...

Jotters switch between criticising and sympathising with David Jones over the bizarre EB Private Equity offer, while others expect the RBA to hold interest rates.

Yet more strange details are emerging from what must be the briefest takeover offer in Australian corporate history. Australia’s business commentators offer a mixture of criticism and sympathy for David Jones in the wake of EB Private Equity’s suspicious takeover offer.

The Australian’s Richard Gluyas examines what looks like an inherent contradiction in the excuse offered by EB chairman John Edgar as to why he withdrew the proposal for David Jones.

"There are a number of bizarre aspects to this story of a takeover bid that never really was. First, not once since EB first flagged its interest on May 22 to DJs' chairman Bob Savage – again by letter, with no return address or contact details – has Savage actually spoken to EB chairman John Edgar. Also, Edgar's stated reason for pulling out yesterday is bizarre, given that he generated the publicity he is now blaming for derailing his grand plan, if there ever was one. On Saturday morning, Edgar is understood to have spoken to local public relations firm Cannings about setting up some interview times with local media outlets, including The Australian. That part of the plan went well: the resulting stories appeared in yesterday's newspapers.”

Fairfax’s Adele Ferguson writes that it would be understandable if David Jones shareholders were confused as to whether they should be crying, laughing or plotting revenge.

"For some, the David Jones announcement on Friday of a takeover proposal meant they made a lot of money as shares jumped 17 per cent at one stage. For others, it is a case of feeling short-changed. For this reason, the regulators and class-action lawyers will be trawling through the timeline of events that led up to Friday's and yesterday's announcements, including a trading halt, to ensure the company has not accidentally misled the market through negligence by not issuing a strong enough caution. There is also a strong case for corporate regulator ASIC to search the David Jones share registry to ascertain whether or not any unusual trading has taken place since EB Private Equity first posted a letter to David Jones chairman Bob Savage, which he received on May 28. As part of its job to ensure market integrity, ASIC will need to rule out the current market speculation that this was an elaborate case of window dressing by some mischievous traders on the last day of trading for the 2012 financial year.”

Fairfax’s Eli Greenblat asks quite simply why David Jones wasn’t put into a trading halt earlier.

"The farce has made a mockery of the stock exchange's continuous disclosure rules and raises the question of why the takeover offer from EB Private Equity was made public by David Jones in the first place when even the most basic investigation of the company showed the takeover approach lacked credibility. David Jones claims it had to make the offer public because of the continuous disclosure rules and the fact that an obscure blog in Newcastle, England, was about to leak the story anyway. Just who owns that blog and the owner's motivation remain unclear.”

Business Spectator’s Stephen Bartholomeusz says the reinforced takeover target status of David Jones probably won’t fade, despite the withdrawal of the EB proposal.

"The larger point made by the affair, however, will linger. There had already been speculation that the department store operator’s poor trading performance within a very difficult retail environment and its depressed share price could lead to a private equity bid, or an assault from Solomon Lew’s Premier Investments. The EBPE approach highlighted the rationale for such speculation – David Jones’ ownership of four of the best retail property sites in the country, its flagship stores in Sydney and Melbourne. A bid for David Jones would be more of a property play than a retail play. The curious EBPE affair and the attention it has generated will have ensured that a lot of files on David Jones held by private equity firms and other retailers around the globe were dusted off over the weekend in order to run the numbers on a tilt at the group, with a particular focus on the value of those properties."

Fairfax’s Elizabeth Knight has discovered a fashion model who brings a first-hand account of dealings with the infamous John Edgar, while her colleague Michael West also weighs in.

The big economic event of today is of course the Reserve Bank’s decision on interest rates. Fairfax’s Peter Martin says all bets are on governor Glenn Stevens to keep rates where they are. A prominent economist writing in The Australian under the pen name Henry Thornton agrees.

In other company news, The Australian’s John Durie says yesterday’s profit upgrade at Lend Lease show that things are finally falling into place for chief executive Steve McCann. Fairfax’s Insider columnist Ian McIlwraith says 3500 investors are awaiting the fate of Providence Capital.

And finally, Fairfax’s Peter Cai finds that Chinese millionaires have picked Australia as their third most popular tourist destination.


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